Apple still gets nod in cutthroat market

Investors gave Tim Cook and Apple Inc. a strong vote of confidence by not running for the exits Thursday after the death of visionary co-founder and former chief executive Steve Jobs, but the company will have little time to mourn as the technology landscape remains as competitive as ever.

Shares of Cupertino, Calif.-based Apple closed at US$377.37 on the Nasdaq, down US88¢ or 0.2% after briefly gaining as much as 2%.

Mr. Cook, who has served as interim chief executive in the past, took over Apple permanently when Mr. Jobs resigned in late August. So far, analysts and investors are on his side.

“While Mr. Jobs’ passion, creativity and keen eye for consumer preference will be missed, we believe Jobs and Apple’s executive team have built an unparalleled talent base and corporate culture that sets the table for future success and innovation,” he said in a note.
A Bloomberg survey showed Apple shares recommended by 49 analysts, with no sell ratings and an average price target of US$499.40.

Brian Anderson, a strategic management and entrepreneurship professor at Richard Ivey School of Business in London, Ont., said if there was a referendum on Mr. Cook, it has happened already.

“I don’t think there’s a ticking clock on Tim Cook. This is a symbolic shift, but realistically he’s been running the day-to-day since January,” Mr. Anderson said. “He’s proven his mettle.”

While tributes continue to flow in for Mr. Jobs, Mr. Cook will be busy preparing for the launch of the iPhone 4S on Oct. 14. Apple is also moving into cloud computing, a technology that stores data online for easy access.

Another key area for Apple, emphasized by Mr. Cook in his iPhone 4S presentation this week, will be the largely untapped Asian market where it faces stiff competition. Apple generated about US$3.8-billion in China in the most recent quarter, but there is huge room for growth.
Mr. Anderson said part of the difficulty with that market is the constant demand for newer, better technology and features.

“Obsolescence happens much more quickly over there,” he said. “There’s an expectation of dynamism that isn’t the model Apple follows.”

This is certainly the case considering it took 16 months to update the iPhone 4. But don’t expect the company to change.

“It’s not in Apple’s DNA to change to meet the market, but to change the market,” Mr. Anderson said. “Jobs has said that market research doesn’t help when people don’t know how to articulate their needs. What Apple wants to do is introduce China and other Asian markets to the way they do things and pull them into the Apple ecosystem.”

John Pliniussen, a marketing professor at Queen’s University specializing in technology and business innovation, said Apple will continue to offer products that are user-friendly with great design. But some internal voices that had been overruled by Mr. Jobs now will get to assert themselves. This will help showcase that Apple is prepared for life after Mr. Jobs.

“Any products currently in development should be attributed to Steve, but anything from here on in without his involvement should be a different approach. It should be connected to a different personality. That’s very important,” he said.

Mr. Jobs, 56, who fought a very public battle with a rare form of pancreatic cancer in 2004 and later received a liver transplant, resigned as chief executive on Aug. 24. Shares fell 3% the next day before reaching a record high of US$413.45 on Sept. 20.

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